One of the frustrating aspects of politics is that the right
hand doesn’t always seem to know what the left hand is doing, often to the
detriment of the very citizens that lawmakers and public agencies are
attempting to serve. A classic example of this is SB 535 (DeLeon), a bill
currently working its way through the Legislature.
SB 535 proposes to allocate a portion of greenhouse gas
(GHG) emitter fees collected as part of the cap-and-trade program under AB 32,
the state’s global warming law, to a trust intended to offset the impacts of
climate change on disadvantaged communities.
On the surface this sounds like a good idea, and it would be but for the
fine print. SB 535 does nothing to
address the impact on small and minority-owned businesses and the communities
they serve of the significantly higher electricity and natural gas rates
associated with cap-and-trade. These
costs have recently been estimated at hundreds of millions of dollars.
So what does this have to do with policy-making in a
vacuum? The Public Utilities Commission
(PUC) is currently engaged in an ongoing assessment of how best to distribute
the GHG fees that will be collected under cap-and-trade. The state’s major energy providers have
strongly urged that cap-and trade funds be returned to ratepayers to mitigate
the dramatically higher electricity and natural gas rates that will result from
this and other climate change policies.
SB 535 would effectively reduce the amount of relief that would
otherwise be available to minority-owned businesses and low-income ratepayers.
All Californians are suffering from steadily increasing
energy costs, but small and minority-owned businesses and low-income
communities have been hit the hardest.
It is a well-established fact that these sectors typically spend a
disproportionately higher percentage of their incomes on utilities and
fuel. There’s a domino effect here: as small businesses struggle to keep up with
higher utility bills, they have to cut back elsewhere. That usually translates to laying off workers
or even closing up shop altogether. At a
time when California’s unemployment rate among African Americans is an
astounding 20 percent, and an equally unacceptable 14.7 percent among
Hispanics, this is devastating.
Denying rate relief from higher cap-and-trade utility bills
is like destroying the life boats on a sinking ship.
This is not to say that Senator DeLeon’s desire to allocate
a portion of cap-and-trade fees to disadvantaged communities is not laudable –
it is. But as it stands his bill, SB
535, fails to address the acute need of minority-owned businesses and
low-income families for solid protection from cap-and-trade’s utility rate
increases. Here are some suggestions to
re-focus SB 535 to make it more valuable to the community:
1.
Arrange
for the bill to be heard in the Assembly Utilities and Commerce Committee. This Committee is familiar with how energy
prices work and the ramifications of steep rate increases, and could offer
valuable insights into how to modify SB 535 to meet the most pressing needs of
disadvantaged sectors.
2.
Study the information being developed as part of
the PUC process, notably the testimony of energy providers like Southern
California Edison, which observed: "The
… cap-and-trade program is expected to dramatically increase customers’
electricity costs … if this collective cost increase is not mitigated … the
corresponding rate and bill increase will be substantial."
3.
Solicit more input from small and minority-owned
businesses and local non-profit groups to craft modifications that will
guarantee relief from higher utility costs before SB 535 moves forward.
It’s not enough to have good intentions when there’s only a
limited amount of money available and the need is so great. Laws must be developed in the context of
other government efforts and relevant, publicly available information in order
to achieve a fully informed result that will actually deliver help where it’s
needed the most. SB 535 would benefit
greatly from such a process, as would the small and minority-owned businesses
and disadvantaged communities it seeks to assist.